The NF2 tumor suppressor gene encodes an intracellular membrane-associated protein, called merlin or schwannomin, which belongs to the band 4.1 family (ERM proteins) of cytoskeleton-associated proteins that link cell surface glycoproteins to the actin cytoskeleton. Merlin growth suppression is dependent on its ability to form a productive N-term/C-term association. Merlin exists in "open" (inactive form) and "closed" (active growth suppressiveform) conformations, which are regulated by an intramolecular association between the N- and C-termini of the protein. Numerous studies demonstrate that merlin phosphorylation plays an essential role in dictating its conformation and binding activity. Recently, we showed that wild-type merlin, but not patient-derived mutant (L64P), selectively binds PIKE-L and inhibits Phosphoinositol 3-kinase (PI 3- kinase) activity. PIKE (PI 3-Kinase Enhancer) is a brain-specific GTPase that binds to PI 3-kinase and stimulates its lipid kinase activity. This suppression of PI 3-kinase activity results from merlin disrupting the binding of PIKE-L to PI 3-kinase. Induction of merlin substantially diminishes PI 3-kinase/Akt signaling pathway in Schwannoma cells. Phosphorylation and phosphoinositol lipids binding coordinately mediate the activation of ERM proteins. However, whether Akt phosphorylates merlin and phosphoinositol lipids bind to merlin also control merlin activity remains elusive. We hypothesize that merlin is physiologically regulated by a negative feed-back mechanism of PI 3-kinase/Akt cascade. Specifically, we will test whether Akt phosphorylates merlin and modulates its conformation and subcellular localization. In addition, we will determine whether Akt phosphorylation and PI (3,4,5)P3 synergistically mediate merlin's binding activity to the critical downstream effectors, resulting in abolishing merlin's tumor suppressive activity. Identification of signaling pathways mediating merlin phosphorylation and binding activity is essential not only for understanding the physiological functions of merlin, but also for the future development of novel drug treatments for this disease.